Activist investor seeks to oust Trump friend Barrack from CEO job at Colony Capital

This post was originally published on this site

https://i-invdn-com.akamaized.net/trkd-images/LYNXMPEFAP1IP_L.jpg

By Svea Herbst-Bayliss

BOSTON (Reuters) – Activist investor Blackwells is pushing to remove Tom Barrack, a billionaire friend of President Donald Trump, as CEO of Colony Capital, saying his mismanagement of the real estate and investment firm has cost shareholders billions of dollars in lost gains.

Blackwells, which owns a 1.85% stake in Colony Capital, also wants to install five new directors on the company’s board, saying investors have soured on the company during Barrack’s tenure and will return only when a new leader is named and independent directors are seated.

Colony Capital’s share price has tumbled 20% to trade at $4.78 since Barrack, the executive chairman, was named to the additional post of CEO a year ago.

“It is time for Mr. Barrack to go and for the Board to be reconstituted with truly independent and experienced business leaders, who can provide effective and constructive oversight,” Jason Aintabi, Blackwells’ chief investment officer said in a statement.

Blackwells said Barrack was responsible for a three way merger in 2016 that the hedge fund says cost shareholders $6 billion in wealth. It also said the current board for was too deferential to Barrack.

The hedge fund said it plans to nominate a handful of directors with experience in finance, asset management, commercial real estate, hotel and casino management and restructuring and corporate governance at next year’s annual meeting. Colony Capital did not immediately respond to a request for comment.

The announcement comes just months after Blackwells and Colony Capital, which invests $44 billion, in February announced that they had worked together to seat two new directors and agreed on naming a third.

The hedge fund also called Barrack, who chaired Trump’s Inaugural Committee, a distracted CEO. The inaugural committee has been probed by congress and federal agencies.

“Three things are necessary for Colony to succeed again,” Aintabi wrote. “The Company must be simplified, must be led by a respected executive with significant public markets experience and must have a Board that is fully independent and willing to exert influence and oversight even when the decisions are uncomfortable.”

Blackwells intends to nominate former Bank of America Merrill Lynch (NYSE:) executive Jennifer Hill, former Credit Suisse (SIX:) executive William Johnson, former OneMain CEO Jay Levine, former co-CEO of Ares Commercial Real Estate Corp. Todd Schuster and Eldorado Resorts board member David Tomick as directors.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Add Comment